Federal Court of Australia Australian Mud Company Pty Ltd v Globaltech Corporation Pty Ltd (No 2) [2022] FCA 88 File number(s): NSD 1040 of 2019 Judgment of: ROFE J Date of judgment: 17 February 2022 Catchwords: EVIDENCE – application for leave to rely on evidence pursuant to rule 34.50(2)(b) of the Federal Court Rules 2011 (Cth) – evidence relating to conduct and results of experiments – application opposed in part – relevant evidence cited in all parties' evidence in chief and joint expert report – no prejudice found to opposing party – leave granted Legislation: Federal Court Rules 2011 (Cth) Cases cited: Australian Mud Co Pty Ltd v Globaltech Corp Pty Ltd (2018) 138 IPR 33 Beadcrete Pty Ltd v Fei Yu trading as Jewels 4 Pools [2012] FCA 1091 Generic Health Pty Ltd v Bayer Pharma Aktiengesellschaft [2014] FCAFC 73 Globaltech Corporation Pty Ltd v Australian Mud Company Pty Ltd (2019) 145 IPR 39 Voxson Pty Ltd v Telstra Corporation Limited (No 10) (2018) 134 IPR 99 Division: General Division Registry: New South Wales National Practice Area: Intellectual Property Sub-area: Patents and associated Statutes Number of paragraphs: 38 Date of hearing: 8 February 2022 Counsel for the Applicants: Mr C Dimitriadis SC with Ms P Arcus Solicitor for the Applicants: Gilbert + Tobin Counsel for the Respondents: Mr A Ryan SC with Mr A Fox SC Solicitor for the First and Second Respondents: Griffith Hack Solicitor for the Third and Fourth Respondents: Bird & Bird ORDERS NSD 1040 of 2019 BETWEEN: AUSTRALIAN MUD COMPANY PTY LTD First Applicant REFLEX INSTRUMENTS ASIA PACIFIC PTY LTD Second Applicant AND: GLOBALTECH CORPORATION PTY LTD First Respondent GLOBALTECH PTY LTD Second Respondent BOART LONGYEAR LIMITED (and another named in the Schedule) Third Respondent order made by: ROFE J DATE OF ORDER: 17 February 2022 THE COURT ORDERS THAT: 1. The Respondents are granted leave under rule 34.50(2)(b) of the Federal Court Rules 2011 (Cth) to tender as evidence in the proceeding: (a) The test results contained in Confidential Exhibit BW-1 to the Affidavit of Brett Wilkinson sworn 24 December 2020 (Wilkinson Affidavit); (b) The methodology and process by which the test results were obtained, as deposed in the Wilkinson Affidavit; (c) Sub-paragraphs 4(c) and 4(d) of the Affidavit of Khaled Heljeh affirmed 26 Junes 2020 (Heljeh 1 Affidavit); and (d) Pages 7 and 8 of the Confidential Exhibit KH-1 to the Heljeh 1 Affidavit, which comprises the documents titled 'Chart Title' (UPIX Test Chart) and 'Further Description of the Orifinder UPIX Tool' (Confidential Further Description). 2. Costs be reserved. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT ROFE J: 1 The Respondents, Globaltech Corporation Pty Ltd, Globaltech Pty Ltd, Boart Longyear Ltd and Boart Longyear Australia Pty Ltd (Respondents) filed an interlocutory application dated 29 October 2021 seeking leave, if it be required, under Rule 34.50(2)(b) of the Federal Court Rules 2011 (Cth) (FCR) to tender the following evidence: (a) the test results contained in Confidential Exhibit BW-1 to the Affidavit of Brett Wilkinson sworn 24 December 2020 (Wilkinson Affidavit); (b) the methodology and process by which the test results were obtained, as deposed in the Wilkinson Affidavit; (c) sub-paragraphs 4(c) and 4(d) of the Affidavit of Khaled Hejleh affirmed 26 June 2020 (Hejleh 1 Affidavit); and (d) Pages 7 and 8 of the Confidential Exhibit KH-1 to the Hejleh 1 Affidavit, which comprises the documents titled 'Chart Title' (Test Chart) and 'Further Description of Orifinder UPIX Tool' (Further Description)(together, the Documents). 2 Leave is sought because in September 2021 the Applicants, Australian Mud Company Pty Ltd and Reflex Instruments Asia Pacific Pty Ltd (Applicants), indicated that they would contend at trial that the evidence related to the conduct and results of experiments and therefore leave of the Court would be required to lead such evidence pursuant to r 34.50, which leave they would oppose. 3 For present purposes the Respondents proceeded with the leave application on the footing that the Applicants' contention that r 34.50 is engaged is correct. 4 Prior to the hearing, the Applicants consented to the Respondents being granted leave pursuant to FCR r 34.50(2)(b) in respect of paragraphs 1(a) and (b) of the Application. The Applicants maintained their objection to paragraphs 1(c) and (d). 5 In support of the application the Respondents rely upon an affidavit of Leanne Michelle Oitmaa sworn on 29 October 2021 (Oitmaa Affidavit). 6 The Applicants rely on the Affidavit of Christopher Edmund Duval Williams dated 7 February 2022 in relation to the Application (Williams Affidavit) in support of their opposition. The patent, general background and the UPIX device 7 The Respondents' sell and offer for sale a core orientation device known as the UPIX device which is used to orientate core samples taken from mine bore holes. 8 In the proceeding the Applicants assert that the Respondents' UPIX device infringes certain claims of their patent: Australian standard patent no: AU2010 200162 entitled "Core Sample Orientation" (the Patent). 9 There has been previous litigation between the patentee, Australian Mud Company Pty Ltd (AMC), and the first and second respondents in this proceeding, Globaltech Corporation Pty Ltd and Globaltech Pty Ltd (Globaltech), in respect of the Patent. See: Australian Mud Co Pty Ltd v Globaltech Corp Pty Ltd (2018) 138 IPR 33 per Besanko J and Globaltech Corporation Pty Ltd v Australian Mud Company Pty Ltd (2019) 145 IPR 39 per Kenny, Robertson and Moshinsky JJ. The outcome of that previous litigation was that certain "Orifinder" devices of Globaltech were found to be infringing. The UPIX device is a subsequent product of Globaltech which has various modifications and alterations which Globaltech submits have the effect that the device and its method of operation do not fall within the asserted claims of the Patent. 10 Without considering the Patent in detail, relevantly for this application claim 1 and the third paragraph thereof provide that a feature of the claimed method is (emphasis added): "Recording the orientation of the inner tube at predetermined time intervals…" 11 The Respondents assert that in the case of their UPIX device, recordings of the orientation of the inner tube are not made at predetermined time intervals, but, rather, at unpredictable time intervals. 12 On 24 June 2019, the Applicants filed an application for preliminary discovery seeking the firmware used in the V6 Tool and any circuit diagrams for the V6 Tool. In the event, discovery of the source code, circuit diagrams and a working V6 Tool for inspection and testing was ordered in September 2019. The Applicants relied on the affidavit of Professor Tapson made 20 June 2019 (Tapson 1) in support of their application. Professor Tapson referred to the Documents in Tapson 1 and noted that he required further information to enable him to form a view as to infringement. The Documents had been provided to the Applicants under cover of letter from the Respondents' lawyers dated 15 and 20 March 2019. 13 On 5 September 2019, Besanko J made orders, inter alia, that the prospective (at the time) respondents were to: (a) give discovery and inspection to the prospective applicants of the schematic circuit diagrams for the Orifinder V6 Tool; (b) give discovery and inspection to the prospective applicants of an electronic Document or Documents recording or evidencing the firmware source code used in the Orifinder V6 Tool, such inspection to be conducted by the prospective applicants' independent expert at the offices of Watermark Intellectual Property Lawyers at Level 28, 100 Miller Street, North Sydney, New South Wales; and (c) make available a working Orifinder V6 Tool (UPIX Device) for non-destructive inspection and testing by the prospective applicants' independent expert and solicitors at the offices of Watermark Intellectual Property Lawyers at Level 28, 100 Miller Street, North Sydney, New South Wales. 14 On 21 and 22 October 2019, Professor Tapson attended Watermark's North Sydney offices for an inspection of the UPIX Device and its firmware. Professor Tapson later set out his observations and analysis of the UPIX Device he inspected, which he called the "V6 Tool", in his second affidavit dated 15 October 2020 (Tapson 2) at [32]-[55]. 15 On 2 December 2019 the proceedings were commenced by the Applicant. 16 In the course of these proceedings, Besanko J made an order on 19 June 2020 by which the Respondents were to produce and serve on the Applicants, amongst others, the Documents verified by an officer of the Respondents. 17 The Documents were identified in the terms of the order as part of a "Verified Product Description", which the Respondents submit picks up paragraph 6.1.4 of the Intellectual Property Practice Note (IP-1). The Respondents observe that paragraph of the Practice Note says: "Further, where infringement is in issue, the parties should consider whether the alleged infringing party should provide a product description, or a method or process description, in respect of the accused product or accused method or process, so as to avoid the need for experiments or other scientific or technical investigations and/or to obviate or minimise the scope of any application for discovery." (Emphasis added.) 18 The Heljeh 1 Affidavit was made in compliance with Besanko J's order. Mr Hejleh verified the accuracy of the UPIX Test Chart and the Confidential Further Description in paragraph 6 of the affidavit which states: "I verify that I am personally acquainted with the facts to which the Documents relate and confirm that the information contained in the Documents relates to and accurately describes the operation of the Orifinder UPIX Tools." 19 In November 2020, the Applicants filed their evidence in chief on infringement, including the second affidavit of Professor Tapson (as previously defined as Tapson 2). In Tapson 2, Professor Tapson referred to Tapson 1 and stated that he maintained the evidence that he gave in that affidavit. Professor Tapson then described his physical examination of the UPIX V6 Tool in October 2019, and the operation of the UPIX V6 Tool based on that physical inspection, and separately analysed the Flowchart, the UPIX V6 Circuit Diagrams, the V6 source code (or firmware), and the Test Chart. At [78] and following, Professor Tapson refers to the Test Chart and gives evidence as to why in his opinion at [83] "the intervals between shots are not variable as suggested (e.g. as shown in the V6 [Test Chart])". 20 The service of Tapson 2 was not accompanied by any reservation or qualification in respect of Professor Tapson's comments about and opinions based on the Documents, or the Applicants reliance on his opinions. 21 In December 2020, the Respondents filed their evidence in answer on infringement. This evidence included the Respondents' experts responding to those parts of Professor Tapson's evidence wherein he discussed the UPIX Test Chart and the Confidential Further Description. For example, the affidavit of Adrian Edmonds sworn 21 December 2020 (see [44] and [45]) and the affidavit of Bernard Charles Peter Berry sworn 23 December 2020 (see [40]-[42]). 22 In July 2021, the Applicants filed their evidence in reply on infringement including the fourth affidavit of Jonathan Craig Tapson affirmed 7 July 2021 (Tapson 4). Professor Tapson at [52] responds to Mr Berry's affidavit at [42] by referring to Tapson 2 at [80] and his analysis of the cycles in the Test Chart. 23 On 11 August 2021, the experts for the parties held their joint expert conference on infringement. The experts indicated the basis for their opinions in the Joint Expert Report (JER), and when discussing the operation of the V6 Tool in the JER referred to the Flowchart, the Test Chart and the Additional Test Charts. 24 In the JER, three of the four experts; Mr Edmonds, Professor Tapson and Mr Berry, stated that their opinion was based on the Test Chart, amongst others. 25 On 16 August 2021 the respondents' lawyers, Griffith Hack, wrote to the Applicants' lawyer, G+T, confirming that the First and Second Respondents intended to rely on the Hejleh 1 Affidavit and the Wilkinson Affidavit among other affidavits at trial. On the same date Bird & Bird wrote to G+T confirming that the Third and Fourth Respondents also intended to rely on the affidavits relied on by the First and Second Respondents at trial. 26 On 9 September 2021, G+T wrote to Griffith Hack and indicated that it was the Applicants' view that FCR r 34.50 applied to 4(c), 4(d) and Exhibit KH-1 of Hejleh 1, the Wilkinson Affidavit and Exhibit BW-1 to the Wilkinson Affidavit, observing that the rule had not been complied with, and enquiring whether the Respondents would be seeking leave under FCR r 34.50(2)(b) to rely on that evidence. 27 The Respondents submit that despite having the UPIX Test Chart and the Confidential Further Description for two years and filing infringement evidence in chief from their expert in which he relied on the documents in forming his opinion, the 16 August 2021 letter was the first time the Applicants had raised any complaint as to the Documents and their provenance. 28 The Test Chart has no title (other than the words 'Chart Title') and no description is provided on the chart itself. In a letter from the Respondents' lawyers dated 12 March 2019 the Test Chart is described as follows: "The following is a test chart that has been produced from an Orifinder UPIX tool. The x-axis represents the shot reference, and the y-axis represents the time interval from the previous shot. The chart plainly illustrates the unpredictable intervals in time between shots." 29 The Applicants submit that if leave is granted they will suffer prejudice as there is no explanation as to how the Documents were prepared. The Applicants note that the Test Chart and correspondence attaching it does not identify how, where, by whom and under what conditions this Test Chart was generated. 30 At the hearing of the application, Senior Counsel for the Respondents advised that the Test Chart was generated by Mr Wilkinson, one of the Respondents' witnesses. 31 The Applicants submitted that it would be a relatively straightforward exercise to excise any references to the Documents from the affidavits and the JER. 32 The power to grant leave is not expressed to be confined by any particular matters. In Voxson Pty Ltd v Telstra Corporation Limited (No 10) (2018) 134 IPR 99, Perram J set out a number of factors relevant to its exercise at [6]: (a) whether the persons who conducted the experiment are available for cross-examination: Generic Health Pty Ltd v Bayer Pharma Aktiengesellschaft [2014] FCAFC 73 (Bayer) at [129]; (b) the extent to which the party conducting the experiment has prevented the other party from viewing the experiment (Bayer at [128]); (c) the time at which the application for leave is made (Beadcrete Pty Ltd v Fei Yu trading as Jewels 4 Pools [2012] FCA 1091 (Beadcrete) at [7] per Jagot J); and (d) prejudice to the other party (Beadcrete at [12]). This is related to (b), but there may be other species of prejudice, too. 33 This is not, of course, an exhaustive list of discretionary considerations. I have discussed those that are relevant below. Consideration 34 I am satisfied that the Applicants are not prejudiced by what has occurred. They will be able to cross-examine Mr Wilkinson at trial as to the Documents, and to make submissions as to the weight, if any, that should be accorded to the Documents in their closing submissions. 35 The Documents were first put into evidence by the Applicants in their infringement evidence in chief (see Tapson 2). That evidence was not served on the Respondents with any qualifications as to Professor Tapson's opinion or the reliance on the Documents. The discussion of the Documents by Professor Tapson, and his reference to them in forming his opinion as to infringement, led the respondents' experts to respond. 36 This is not a case where the Respondents put the Documents into evidence in support of their case in chief and the Applicants only dealt with them in response. The Applicants made the decision to include the Documents in the material given to Professor Tapson to prepare his evidence for their infringement case and then filed that evidence in their case in chief on infringement. 37 The Documents, in particular the Test Chart, are referred to by three of the four experts in the joint report as a basis for their opinions. I accept that the Test Chart is not the only document relied on by the experts in forming their opinions, but it formed part of the material on which they relied to form their opinion. As such it is not a matter of simply excising the references to the Documents and letting the opinions stand. The same is true for the experts' affidavit evidence. 38 For the reasons stated above I believe it is appropriate for leave to be granted to the Respondents to rely upon the documents referred to in orders 1(c) and (d) of the Interlocutory Application dated 29 October 2021. I also consider it appropriate to reserve costs. I certify that the preceding thirty-eight (38) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Rofe. Associate: Dated: 17 February 2022 SCHEDULE OF PARTIES NSD 1040 of 2019 Respondents Fourth Respondent: BOART LONGYEAR AUSTRALIA PTY LTD